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Problem 2-17 Accounting Values versus Cash Flows [LO2] During 2018, Raines Umbrella Corp. had sales of...

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Finance

Problem 2-17 Accounting Values versus Cash Flows [LO2]

During 2018, Raines Umbrella Corp. had sales of $710,000. Costof goods sold, administrative and selling expenses, anddepreciation expenses were $500,000, $125,000, and $170,000,respectively. In addition, the company had an interest expense of$60,000 and a tax rate of 21 percent. (Ignore any tax losscarryforward provisions and assume interest expense is fullydeductible.)

   

Suppose the company paid out $60,000 in cash dividends. If netcapital spending and net working capital was zero, and if no newstock was issued during the year, what is the net new long-termdebt? (Do not round intermediatecalculations.)

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4.5 Ratings (885 Votes)
Operating Cash Flow Earnings before Interest and Taxes Income Tax Depreciation ExpenseOperating Cash Flow 85000 0    See Answer
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